Gouverneur Bancorp Announces 2010 Third Quarter and Nine Months Results

GOUVERNEUR, N.Y., Aug. 2 /PRNewswire-FirstCall/ -- Gouverneur Bancorp, Inc. (OTC Bulletin Board: GOVB) (the "Company") and its subsidiary, Gouverneur Savings and Loan Association (the "Bank"), today announced the results for the third quarter and nine months ended June 30, 2010.

For the three months ended June 30, 2010, the Company reported net income of $416,000, or $0.18 per diluted share, representing an increase of $102,000, or 32.48% from last year's net income of $314,000, or $0.14 per diluted share.  The annualized return on average assets and average equity for the three months ended June 30, 2010 was 1.13% and 7.35% respectively, compared to 0.92% and 5.91% for the three months ended June 30, 2009.  

For the nine months ended June 30, 2010, the Company reported net income of $1,222,000, or $0.54 per diluted share, representing an increase of  $208,000, or 20.51% over last year's net income of $1,014,000, or $0.44 per diluted share.  The annualized return on average assets and average equity for the nine months ended June 30, 2010 was 1.13% and 7.39% respectively, compared to 0.98% and 6.38% for the same period last year.

Since September 30, 2009, total assets grew $3.3 million, or 2.27%, from $143.72 million to $146.99 million at June 30, 2010, mainly as a result of an increase in securities available for sale of $2.8 million, or 18.63%, from $15.08 million to $17.89 million over the same period.

Deposits decreased $1.46 million, or 1.59%, from $91.44 million at September 30, 2009 to $89.98 million at June 30, 2010.  Advances from the Federal Home Loan Bank of New York increased from $27.0 million to $30.6 million while brokered CDs decreased by $0.3 million, from $1.3 million to $1.0 million over the same period.

The cost of deposits and borrowed funds remains flat as maturities renewed at lower rates. Net interest income after the provision for loan losses increased $650,000, or 18.08%, during the first nine months of the 2010 fiscal year as compared to the first nine months of the 2009 fiscal year.  Non-performing assets have increased from 0.69% at September 30, 2009 to 1.48% at June 30, 2010.    

Shareholders' equity was $22.67 million at June 30, 2010, an increase of 3.75% over the September 30, 2009 balance of $21.86 million.  The book value of Gouverneur Bancorp, Inc. was $10.09 per common share based on 2,246,946 shares outstanding at June 30, 2010.  The company paid a semi-annual cash dividend of $0.17 per share to public shareholders on March 31, 2010.  Cambray Mutual Holding Company, Gouverneur Bancorp Inc.'s parent mutual holding company and holder of 58.36% of the Company's issued and outstanding stock, waived its right to receive that dividend.

Commenting on the year's results, Mr. Charles C. Van Vleet, the Company's President and Chief Executive Officer, stated, "Earnings have been strong through the third quarter ended June 30, 2010, and due to the current economic state, we expect the Federal Reserve will keep interest rates at or near the current level through the end of the year.  The Bank will continue to take advantage of the current short term rates for as long at it is prudent however, should the Fed begin to increase short-term rates, the Company has a strategy in place to extend its liabilities at the appropriate time.  In addition, while nonperforming loans have increased slightly, delinquencies in our loan portfolio have remained at relatively low levels throughout the credit crises."

Mr. Van Vleet continues, "The financial reform bill has now been signed into law, but the new regulations that will flow from it have not yet been written.  All banks are facing increased expenses related to more reporting and compliance requirements as well as the unknown and unforeseen consequences of this legislation.  This compounds the already difficult economic environment and costs that banks are currently facing. It would therefore seem wise to take those necessary steps to increase our capital position as much as possible through retained earnings, to guard against those unidentified circumstances while also increasing shareholder value.  This will also allow the Bank to take advantage of opportunities that may arise in the future."

The Company, which is headquartered in Gouverneur, New York, is the holding company for Gouverneur Savings and Loan Association.  Founded in 1892, the Bank is a federally chartered savings and loan association offering a variety of banking products and services to individuals and businesses in its primary market area in southern St. Lawrence and northern Lewis and Jefferson Counties in New York State.

Statements in this news release contain forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements are based on the beliefs of management as well as assumptions made using information currently available to management. Since these statements reflect the views of management concerning future events, these statements involve risks, uncertainties and assumptions. These risks and uncertainties include among others, the impact of changes in market interest rates and general economic conditions, changes in government regulations, changes in accounting principles and the quality or composition of the loan and investment portfolios. Therefore, actual future results may differ significantly from results discussed in the forward-looking statements due to a number of factors, which include, but are not limited to, factors discussed in the documents filed by the Company with the Securities and Exchange Commission from time to time.

SOURCE Gouverneur Bancorp, Inc.